Growth in
tourism globally has forced some standardization in the facilities made
available to guests at the establishments. This ensures that guests can have a
good feel of what to expect. An increase in business travel too has come about
as businesses have gone global. A substantial amount of traffic is generated
through these business travelers and the growth in this segment is directly
linked to the growth in international business at the hotel location.

Global hotels
and motels, not including casino hotels, generated a volume of business at the
level of $ 488.6 billion in 2006. Revenue contribution of other accommodation
providers who provided accommodation and food services are included in the
estimate. This was a rise of 6.4% over the revenue of the earlier year. By the
year 2011, the hotel and motel revenue is expected to rise by 31.2% to reach
$640.9 billion. The biggest contributor is Europe, contributing 41.8 % by
value. Hotels & motels industry generated revenues of $ 90 billion or 18.4
%.

Marketing
researchers need a broad understanding of marketing in order to communicate and
work effectively with marketing professionals. The main research objectives in
marketing are to suggest that unstructured and informal research designs are
likely to be used when attempting to arrive at a more clear description of an
apparent problem; to indicate that exploratory research designs are typically
used when researchers are trying to identify a potential marketing opportunity.

Introduction

The
hospitality industry is about providing hospitality to travelers. The
hospitality typically includes accommodation, food, beverages and other
recreational facilities.

The hotel
should concentrate and keep up the good work even if the business is already
strong. Each relevant factor needs to be rated according to its importance-
high, medium, or low for the business as a whole. This Hotel Industry utilizes
the latest marketing principles and information technology updates to get a
respectable position in the world market. In the face the worldwide economic
recession, the guests have become more sensitive to price which calls for
effective formulation of the pricing strategy.

Task 1 - Research Planning for Decision Making

A hotel is an
establishment which provides paid lodging usually for a short time. These
establishments often provide additional services such as a restaurant, swimming
pool, health club and even child care. Conference and meeting rooms are also
provided by some for conventions and meetings for groups.

The
Grande Bretagne Hotel is a 273-room hotel (Standard – 233, Executive – 30,
Suites - 10). It is located on the corner of Marloes Road and Cromwell Road in
West London. The hotel opened in March 2007. It is of a four star standard with
rooms of approximately 29 square meters.

The
executive rooms and suites additionally include a generally higher quality of
furnishings and fittings selection of magazines bathrobes and a higher standard
of toiletries, telephone in the bathroom.

It
is part of a French national hotel group that has 45 hotels in France and last
year started expanding into Europe, four hotels have already been opened in
Paris, Berlin, Madrid and London and the company is actively seeking sites in
other major European capitals.

The
Grande Bretagne Hotel's mission is to provide quality hospitality services to
its guests in a comprehensive and cost competitive manner.

«The
hotel should concentrate and keep up the good work even if the business is
already strong» (Hotel Front Office Management
by James A. Bardi March
2006, Hardcover, 4th edition). Each relevant factor needs to be rated according
to its importance- high, medium, or low for the business as a whole. The Grande
Bretagne Hotel Industry utilizes the latest marketing principles and
information technology updates to get a respectable position in the world
market.

Every
business with the global prospects in the multi dimensional, volatile
atmosphere has to introspect its strategies taking into consideration the
strengths, weaknesses, opportunities and threats. The hotel industry also tags
along the line and has to undertake smart and innovative moves to woo its
clientele who expect best possible service at competitive rates.

Though
the sales and market conditions are changing rapidly, the marketing principles
are not changing. Hotel owners and managements tend to be more inclined towards
marketing and sales rather than cost control, constantly seeking to maximize
room sales - double- bed occupancies. All this may fail and such a scenario may
result in profit problem on cyclic basis, which may sometimes lead the hotel
into liquidation or forced sale.

The
required first step in SWOT analysis is the definition of the desired end state
or objective. The definition of objective must be explicit and approved by all
participants in the process. This first step must be performed carefully
because failure to identify correctly the end state aimed for leads to wasted
resources and possibly failure of the enterprise.

Strengths are attributes of the
organization that are helpful to the achievement of the objective. Weaknesses
are attributes of the organization that are harmful to the achievement of the
objective. Opportunities are external conditions that are helpful to the
achievement of the objective. Threats are external conditions that are harmful
to the achievement of the objective.

The
aim of any SWOT analysis should be to isolate the key «issues» that will be
important to the future of the hotel; and that subsequent marketing planning
will address.

Following
diagram indicates the Strengths and Weakness Analysis of the Grande Bretagne
Hotel.

Strengths

-
England's
rich cultural heritage

-
International
hotel chain

-
All
rooms have suite facilities

-
Demand
far exceeds Supply

-
Global
economical turn-up

-
New
business opportunities

Weaknesses

-
Capital
intensive

-
Lack
of adequate Man power

-
Regional
imbalance of hotels

-
Long
gestation period

-
Poor
infrastructure and cleanliness

-
Huge
labor turnover

-
Less
corporate ownership

Opportunities

-
Boom
in tourism

-
Privatization
of airlines

-
Increase
in disposable incomes

-
Boost
in tax concessions

Threats

-
Sensitive
to disturbances in the country

-
Competition
from other European countries

-
High
service and luxury taxes may render England as an unviable destination.

-
Lack
of trained entrepreneurs

SWOT
analysis allows author to formulate the main objectives of the Grande Bretagne
Hotel:

- Increase
sales volume.

- Increase
revenue.

- Achieve or
increase profits.

- Increase or
maintain market share.

- Eliminate
competition.

Factors
influencing price-determination:

- Production
and distribution costs.

- Substitute
goods available.

- Reaction of
distributors.

- Reaction of
consumers.

Profitability
is driven by efficient operations mainly, as many costs are fixed in nature.
Several recent changes in the industry causing profitability pressures. Growth
in internet reservation channels has helped improve the industry occupancy rate
of hotels. However, it has caused a cost pressure too. Increased sales through
these intermediaries has allowed them to charge higher amounts of commissions
and degraded the ability of the players to control pricing or the presentation
of their products. Indirect competition through alternative forms of holiday
accommodation, are increasing. Holiday homes, timeshare accommodation and such
other shared accommodation schemes are biting into the shares of the mainstream
hotel and motel industry.

The
outlook for the hospitality market in England is optimistic and will continue
to remain so, in my opinion. The economy’s buoyancy, initiatives to improve
infrastructure, growth in the aviation and real estate sectors and easing of
restrictions on foreign direct investment will fuel demand for hotels across
star categories in the majority of markets. Several international chains have
been established or enhanced their presence here. England is one of the world’s
fastest growing tourism markets.

External
environment

Economic Environment

Positive forces include the generally prosperous economy that is
currently in place, full employment, rising wages, and low inflation, leading
more people to be able and willing to spend money and to get away for some
time. The Grande Bretagne Hotel offers an affordable alternative to a flyaway
destination. There are conference, banqueting and leisure facilities.

Geographical/Competitive Environment

The Grande Bretagne Hotel has:

- The brasserie/coffee shop seating 120 people and open for all day
dining and an a la carte restaurant seating 70 people opens every day for lunch
and dinner only; a 50 seat bar adjoining the a la carte restaurant open in the
evenings and providing light entertainment (piano music).

- A lobby/lounge bar seating 120 people open from 1.00 a.m. until midnight, seven days a week, suitable for informal business meetings and rendezvous.

-A gym with a selection of exercise equipment and a small room for
aerobics, yoga lessons.

- A business centre.

These
surroundings will attract and retain guests who appreciate such refined
environments.

Legal/Political Environment

As
faced by all businesses, the proper insurance needs shall be met and all
operations and policy manuals shall be reviewed by appropriate legal experts.
The facility will obtain all the necessary building permits prior to
construction. Present facility zoning allows for this proposed use, including
bars, restaurant, and business centre.

«Networking
within business and civic groups is important; even if the business results are
not immediately felt, it is an excellent public relations opportunity» (www.hotelinteractive.com).
Live piano, or jazz style trio, on the weekends will add excitement to the
hotel and draw community residents and guests from other properties.

Social Environment

Smoking
Ban may have an affect on businesses in the future. The implications of an
overall ban would have on the industry would be more so in the pub sector,
hotels having a more family orientated and diverse market segment could relish
the smoke free environments.

Consumer’s
behavior

Buyer behavior
is focused upon the needs of individuals, groups and organizations. To
understand consumer buyer behavior is to understand how the person interacts
with the marketing mix. As described by Cohen (1991), the marketing mix inputs
(or the four P's of price, place, promotion, and product) are adapted and
focused upon the consumer.

The psychology
of each individual considers the product or service on offer in relation to
their own culture, attitude, previous learning, and personal perception. The
consumer then decides whether or not to purchase, where to purchase, the brand
that he or she prefers, and other choices.

People today
are looking for prevention rather than just cure. In 1994, 32% of New
Zealanders took some form of supplement and in the latest study in 1997 this
figure has increased to 74%. Each different product market consists of buyers,
and buyers are all different in one way or another. They may differ in their
wants, resources, locations, buying attitudes and buying practices. Because
buyers have unique needs and wants, each buyer is potentially a separate
market.

Consumer
involvement is the perceived personal importance and interest consumers attach
to the acquisition, consumption, and disposition of a good, service, or an
idea. As their involvement increases, consumers have a greater motivation to
attend to, comprehend, and elaborate on information pertaining to the purchase.
(Mowen & Minor, 1998, p.64). In the case of low involvement, consumer views
a purchase as unimportant and regards the outcome of his or her decision as
inconsequential. Because the purchase carries a minimal degree of personal relevance
or identification, the individual feels there is little or nothing to be gained
from attending to the details of a purchase. (Hanna & Wozniak, 2001,
p.290). High involvement purchases are those that are important to the consumer
either from a financial, social, or psychological point of views. The purchase
is characterized by personal relevance and identification with the outcome.
(Hanna & Wozniak, 2001, p.291). An individual anticipates a potentially
significant gain from expending time and effort in comparison-shopping before
buying. For example, a girl purchasing an expensive ball dress has a high
degree of personal identification. Therefore, a high level of felt involvement
can increase an individual’s willingness to search for, process, and transmit
information about a purchase.

The most
important factors influencing a consumer’s involvement level are their
perceived risks. The purchase of any product involves a certain amount of risk,
which may include:

- Product
Failure – risk that the product will not perform as expected.

- Financial –
risk that the outcome will harm the consumer financially.

- Operational
– risk that consists of alternative means of performing the operation or
meeting the need.

- Social –
risk friends or acquaintances will deride the purchase.

-
Psychological – risk that the product will lower the consumer’s self-image.

- Personal –
risk that the product will physically harm the buyer.

In a high
degree of perceived risk, decisions in this case may require significant
financial commitments, involve social or psychological implications. In the
case of low degree of perceived risk, decisions in this case may require small
or no financial commitments that involve social or psychological implications.
Consumers may already established criteria for evaluating products, services,
or brands within the choice category.

In high
involvement situations consumers are usually more aroused and more attentive,
which expands their short-term memory capacity to its maximal extent. In low
involvement conditions, the arousal level is apt to be low, so consumers focus
relatively little memory capacity on the stimulus. (Mowen & Minor, 1998,
p.101). As involvement levels increases, consumers may allocate more capacity
to a stimulus.

Evaluative
criteria are the various features a consumer looks for in response to a
particular problem. The number of evaluative criteria used by consumers depends
on the product, the consumer and the situation. ((Neal, Quester & Hawkins,
2000, p.5.3-5.4 & p.5.22) Formal Clothing In the process of evaluation, a
student will evaluate the characteristics of various formal clothing and choose
the one that is most likely to fulfil her or her needs. The evaluative criteria
of the students include tangible cost, social and psychological measures. The
importance of particular evaluative criteria differs from consumer to consumer.
The decision to purchase formal clothing is base on the following evaluative
criteria:

- Price.

- Quality.

- Brand.

- Style.

- Store.

The evaluative
criteria regarding the purchase of formal clothing are complex due to the level
of perceived risk involved with such a high involvement purchase. Typically,
high involvement planned purchases (such as formal clothing) follow the more
complex compensatory decision rules. A compensatory model involves students
evaluating each formal wear they view across all need criteria. In this
instance, one formal wear may compensate for weaknesses in one criterion.

However, often
consumers will go through different stages of rules, that is, they will utilize
a range of rules when evaluating alternatives with different attributes being
evaluated by different rules at each stage. There are certain criteria
regarding the purchase of formal clothing that the students is not willing to
accept at a minimum level. Style and price are two attributes that was found
from the interviews. Students are not prepared to lower their expectations;
therefore the compensatory model does not always apply in this situation. These
two criteria are more non-compensatory rules. Initially a disjunctive approach
was adopted by respondents, where they would evaluate all formal clothing that
meet their requirements concerning style. Then they would move onto an
elimination-by-aspects approach. This involved them choosing formal clothing
that rated highest on their next most important criteria (price), and then
continuing through the other attributes (brand, quality) until only one formal
wear remained. In summary, the formal clothing purchase decision involves both
compensatory and non-compensatory models depending on the stages of the
evaluation.

There
are any numbers of factors that affect a consumer’s decision making. Travel professionals
not only have to appeal to the ego of the consumer with a Hotel’s service that makes
them feel important, they must also deal with outside influencers – like
friends, family, colleagues, and others. Understanding consumer behavior is one
of the top jobs for all marketers. To sell a service, one must understand their
consumer and what motivates them.

There
are a number of strategies that can be employed to obtain loyalty from
consumers. As all business people know, it is cheaper to keep a customer than
to get a new one. However, loyalty in today’s competitive environment is hard
to come by. By studying psychological factors that play into a consumer’s
loyalty and commitment to a hotel and its service, programs to garner that
loyalty have a better chance of succeeding. A traveler will earn points or
rewards by staying at the Grande Bretagne Hotel. Rewarding repeat travelers
with discounts or a points system whereby the traveler can earn points toward
extra amenities or prizes like travel books, digital cameras, etc. can be as
effective as expensive mailings or other marketing campaigns designed to retain
Hotel’s customers.

Advertisers
often show how the benefits of their products aid consumers as they perform
certain roles. Typically the underlying message of this promotional approach is
to suggest that using the advertiser’s product will help raise one’s status in
the eyes of others while using a competitor’s product may have a negative
effect on status.

Motivation
relates to human’s desire to achieve a certain outcome. Many internal factors
we have already discussed can affect a customer’s desire to achieve a certain
outcome but there are others. For instance, when it comes to making purchase
decisions customers’ motivation could be affected by such issues as financial
position, time constraints, overall value, and perceived risk.

Motivation is
also closely tied to the concept of Involvement, which relates to how much
effort the consumer will exert in making a decision. Highly motivated consumers
will want to get mentally and physically involved in the purchase process. Not
all services have a high percentage of highly involved customers but marketers
who market services that may lead to high level of consumer involvement should
prepare options that will be attractive to this group. For instance, marketers
should make it easy for consumers to learn about hotel’s services (e.g.,
information on website, free video preview).

Marketing
plan

The marketing
plan accurately describes the market, customers, service and the competition.
Marketing plan plays an important role in the hospitality industry. It is
essential for the development, growth and sustenance of a business.

For
the first few years the Grande Bretagne Hotel will need to be aggressive in
attracting new guests. The marketing strategy is subject to change upon guest
feedback and surveys.

The
Grande Bretagne Hotel will aim to attract business guests and their partners
needing to hold planning or strategy sessions away from the office in order to
even out revenues throughout the week.

The
Grande Bretagne Hotel will maintain a front office staff member throughout the
night so guests are able to get answers to any question or service when they
need it. This flexibility is especially attractive to the business traveler.
Clients will be able to contact the Grande Bretagne Hotel by telephone, fax,
and e-mail.

By
giving careful consideration to customer responsiveness, The Grande Bretagne
Hotel’s goal will be to meet and exceed every service expectation of its hotel
and lounge services. Its guests can expect quality service and a total quality
management (TQM) philosophy throughout all levels of the staff.

Task
2 – Questionnaire Design and Fieldforce Instructions

A valid
questionnaire measures what it claims to measure. In reality, many fail to do
this. For example, a self completion questionnaire that seeks to measure
people's food intake may be invalid because it measures what they say they have
eaten, not what they have actually eaten. Similarly, responses on
questionnaires that ask general practitioners how they manage particular
clinical conditions differ significantly from actual clinical practice. An
instrument developed in a different time, country, or cultural context may not
be a valid measure in the group you are studying.

Reliable questionnaires
yield consistent results from repeated samples and different researchers over
time. Differences in results come from differences between participants, not
from inconsistencies in how the items are understood or how different observers
interpret the responses. A standardized questionnaire is one that is written
and administered so all participants are asked the precisely the same questions
in an identical format and responses recorded in a uniform manner.
Standardizing a measure increases its reliability.

Just because a
questionnaire has been piloted on a few of your colleagues, used in previous
studies, or published in a peer reviewed journal does not mean it is either
valid or reliable. The detailed techniques for achieving validity, reliability,
and standardization are beyond the scope of this series. If you plan to develop
or modify a questionnaire yourself, you must consult a specialist text on these
issues.

There are two
main objectives in designing a questionnaire:

To maximize
the proportion of subjects answering our questionnaire - that is, the response
rate.

To obtain
accurate relevant information for our survey.

To maximize
our response rate, we have to consider carefully how we administer the
questionnaire, establish rapport, explain the purpose of the survey, and remind
those who have not responded. The length of the questionnaire should be
appropriate. In order to obtain accurate relevant information, we have to give
some thought to what questions we ask, how we ask them, the order we ask them
in, and the general layout of the questionnaire.

As discussed
in last month's issue, there are three potential types of information:

Other factors
related to both dependent and independent factors which may distort the results
and have to be adjusted for - that is, confounding variables.

Let us take as
an example a national survey to find out students' factors predicting the level
of certain knowledge, skills, and attitudes at the end of their undergraduate
medical course. The dependent factors include the students' level of relevant
knowledge, skills, and attitudes. The independent factors might include
students' learning styles, GCSE and A level grades, socioeconomic status,
ethnicity, etc. Confounding variables might include the types and quality of
teaching in each medical school.

Sometimes,
additional questions are used to detect the consistency of the subject's
responses. For example, there may be a tendency for some to tick either
"agree" or "disagree" to all the questions. Additional
contradictory statements may be used to detect such tendencies.

There are
several ways of administering questionnaires. They may be self administered or
read out by interviewers. Self administered questionnaires may be sent by post,
email, or electronically online. Interview administered questionnaires may be
by telephone or face to face.

Advantages of
self administered questionnaires include:

- Cheap and
easy to administer.

- Preserve
confidentiality.

- Can be
completed at respondent's convenience.

- Can be
administered in a standard manner.

Advantages of
interview administered questionnaires include:

- Allow participation
by illiterate people.

- Allow
clarification of ambiguity.

The exact
method of administration also depends on who the respondents are. For example,
university lecturers may be more appropriately surveyed by email; older people
by telephone interviews; train passengers by face to face interviews.

Piloting and
evaluation of questionnaires. Given the complexity of designing a
questionnaire, it is impossible even for the experts to get it right the first
time round. Questionnaires must be pretested - that is, piloted - on a small
sample of people characteristic of those in the survey. In a small survey,
there might be only pretesting of the drafted questionnaire. In a large survey,
there may be three phases of piloting. In the first phase we might ask each
respondent in great detail about a limited number of questions: effects of
different wordings, what they have in mind when they give a particular answer,
how they understand a particular word, etc. In the second phase the whole
questionnaire is administered by interviewers. Analysis of the responses and
the interviewers' comments are used to improve the questionnaire. Ideally,
there should be sufficient variations in responses among respondents; each
question should measure different qualities - that is, the responses between
any two items should not be very strongly correlated - and the non-response
rate should be low. In the third phase the pilot test is polished to improve
the question order, filter questions, and layout.

Usually
respondents spent an average of 33 minutes answering a variety of questions
about their «backgrounds, tastes, and their shopping and media consumption
habits».

The Grande
Bretagne Hotel most (8,852) came from Britain, followed by the U.S. (3,747),
and Norway (3,244). The fewest responses were from Venezuela (197), Portugal
(175), and Austria (90). And responses was split pretty equally between
genders: 51 % of survey takers were female, 49 % male. Most respondents were in
the 13- to 15-year-old age group (60 %), followed by 16- to 18-year-olds (19
%). Only 12 % were 12 and under (which is odd since players are supposed to be
at least 13 to play), and 10 % were 19 and older.

Task
3 - Information for Marketing Decisions

Market
research consists of two primary categories: primary data and secondary data.

Primary data
is made of information obtained through focus groups, surveys, and observation.

Secondary data
is provided by another group, such as the Census Bureau, a professional
association, or think tank. A problem with using secondary data sources is
their information may not relate to your target market or geographic area.

Obtaining
primary data yourself is time consuming and can be expensive; but how much
money have you or your company wasted on advertising or activities that ended
up not generating the business you thought they would?

There is need
to have some primary data in customers’ buying patterns. If there is no a
system that provides you with mechanisms to breakdown data into various groups,
then there is need to begin investigating how to acquire one.

As the hotel
began to study expenses, it discovered that managers were over-scheduling
employees on the weekends and even paying overtime to deal with the expected
increase in customers that marketing was driving in. Naturally most business
would come in on the weekend and the facility would staff up on Friday
afternoons and evenings. When check-in data was examined, management discovered
that most visitors were checking in on Saturday morning. By making scheduling
adjustments and cross-training employees, the hotel was able to use fewer
employees to handle the influx of customers. More employees were given time off
on Friday nights, raising employee morale which resulted in improved customer
service. Soon, expenses were down, revenue was up, and most importantly,
profits were up.

None of that
would have happened if management didn’t take the time to look at the
statistics, analyze the data, and make adjustments.

Surveys can
also provide important information a business can use to improve the customer
experience, the employee experience, or extend the brand through additional
product offerings.

Surveys are
labor intensive since they take a bit of time to create, administer, then
compile and analyze the data. If spending a couple of thousand dollars can lead
to tens of thousands or hundreds of thousands or more in revenue, it’s money
well spent. The same can be said if that investment saves you from spending
even more money to invest in something that your customers don’t want (and
remember: Customers don’t buy what they need. They buy what they want.).

There are lots
of ways to conduct a survey. The method used depends on what data you’re trying
to obtain and what customer segment or segment of potential customers (or
former customers) you’re trying to reach.

For example,
if you own a bricks-and-mortar store, you can ask your customers to complete a
quick comment or survey card while you package their purchases. Of course, they
may not be as entirely honest as they could be since you’re standing in front
of them and, assuming you read the card right after they walk away it’s not
anonymous (you could have them drop it in a box for an extra level of
anonymity).

You could also
mail surveys to customers (with a self-addressed, stamped envelope or SASE),
try phone surveys (you can just imagine how hard they are to conduct), or email
surveys. All of these techniques have pros and cons and we can’t stress enough
that the method you pick should be the best method to be used with the
population you’re targeting. If your customers are in a certain age group who
are not heavy internet users, an internet-based survey administered through
email would be a mistake.

Focus groups
can be a great source of information but you’ll need to consider how you
recruit the participants, what characteristics (demographic and psychographic)
should your participants possess or not possess, and what will you give them as
an incentive to attend.

Only the
rarest of the rare will participate in a focus group just because it sounds
like a fun thing to do. Even surveys need some level of incentive to increase
participation. Including a SASE is a bare minimum. No one is going to provide
the envelope and postage to complete a survey for your business.

Conclusions

The peculiar
nature of the hotel business may compel the management to think short term
about day-to-day problems or the next-meal periods, as the room day is a
perishable item. The room occupancy perishes on the expiry of the day.

Overall, the
environment appears very positive for the Grande Bretagne Hotel. The forces
driving market demand, mainly economic and geographical, are strong, with more
people staying closer to home for shorter getaway trips and their comfort level
of visiting London. On the negative side, there is competition, and it will
take a while for the Grande Bretagne Hotel to get “established” in its market
niche.